Rental accommodation is going to be harder to find and more expensive as the economies of Alberta’s two largest cities continue to recover this year, according to a national rental predictions report.

Housing experts surveyed in the Rentals.ca and Bullpen Research & Consulting’s December National Rent Report say that as Alberta continues to climb out of a recession and the unemployment rate improves, rental rates will, on average rise about three per cent in Calgary and Edmonton.

Supply will slip slightly, even though new units will be added.

In Calgary:

  • The vacancy rate is expected to decrease to 3.2 per cent in 2020 and 2.8 per cent in 2021. The rate remained unchanged at 3.9 per cent from October 2018 to October 2019.
  • Housing purchase prices continue to drop and unemployment remains high, but interprovincial and international migration are strong in the city, meaning there will be more demand for rental units.
  • More people are opting to rent for several reasons: high unemployment rate; economic and political uncertainty, mortgage stress test; millennials are not buying because of affordability issues the desire for the flexibility of renting; and downsizers (empty-nesters coming back into the rental market).

“There’s quite a lot of supply in the pipeline in Calgary,” said Andie Daggett, Urban Analytics manager of rental market data (Alberta). “But because there’s also consistent migration, the supply will be absorbed.”

In Edmonton:

  • The Canada Mortgage and Housing Corporation (CMHC) Housing Market Outlook for this year is 3.4 per cent. The vacancy rate in Edmonton in 2018 was 5.3 per cent, which declined to 4.9 per cent in 2019, according to the CMHC.
  • As more rental buildings becoming available, Edmonton’s rental rates have been decreasing. But 2020 may see rising rents and a lower vacancy rate, according to Jim Fowler, executive director of HomeEd, a non-profit provider of rental housing units. “As such, it’s reasonable to expect rent to go up as vacancy (rates) goes down,” said Fowler. “Given current trends, I would expect rental rates in 2020 to go up between three per cent and five per cent.”
  • Fowler said that Edmonton has few rental options for low-income people, with a shortfall of 20,000 units and growing.

The full report can be viewed here.

© Calgary’s Business


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